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Hiring in Belize
Belize is a Caribbean country located in Central America. Belmopan is the capital and Belize city is the largest city. It has a small economy, mainly comprising of private enterprises. Agriculture and agro based industries are the main sectors, whereby tourism sector is growing rapidly. Its main trading partners are United States, United Kingdom, Mexico and the EU member countries. Global PEO or Employer of Record (EOR) play a pivotal role in providing companies with services related to hiring employees, and ensuring compliance with Belize’s legal and tax regulations. Employment regulations including probation, holidays and termination are covered by the Labor Code. The Labor Code stipulates that employees are entitled to 2 weeks of annual leave. The Income and Business Tax Act postulates that income tax is charged at a flat rate of 25% for residents. Global PEOs facilitate companies by ensuring compliance with Belize’s Labor Code and tax laws.
statutory labor requirements
Probation Period
- Within Belize, the only statutory provision on probationary period relates to employment under an oral contract of employment.
- In this case, the probationary period is considered to be two weeks.
Annual Leave
- Workers are entitled to 2 working weeks’ vacation annually.
Public Holidays
- New Year’s Day (1st January)
- Baron Bliss Day (9th March)
- Good Friday
- Holy Saturday
- Easter Monday
- Labor Day (1st May)
- Commonwealth Day (24th May)
- National Day (10th September)
- Independence Day (21st September)
- Pan -American Day (12th October)
- Garifuna Settlement Day (19th November)
- Christmas Day (25th December)
- Boxing Day (26th December)
Maternity Leave
- A female worker is entitled to fourteen (14) weeks maternity leave on full pay.
- Maternity Allowance is paid to Insured Women who are on Maternity leave from work because of their pregnancy and confinement.
- The Maternity Allowance is paid weekly for a maximum period of 14 weeks.
Sick Leave
- Workers are entitled to 16 days’ sick leave at their basic rate of pay providing they worked an aggregate period of not less than 60 days within 12 months
Work Hours
- The standard work week in Belize is 45 hours or six days a week, with paid overtime.
Overtime
- A worker who works more than:
- 8 hours per day in accordance with the Shops Act;
- 9 hours per day in accordance with the Labor Act;
- 6 days per week; or,
- 45 hours per week should be paid at the overtime rate of one and one-half times (1.5) the regular rate.
Notice Period
- If period of employment is over 2 weeks to 6 months, notice period is of 1 week
- If period of employment is over 6 months to 2 years, notice period is of 2 weeks
- If period of employment is over 2 years to 5 years, notice period is of 4 weeks
- If period of employment is over 5 years, notice period is of 8 weeks
Severance
- Where an employee who has been continuously employed by any employer for a period of
- five to ten years and
- his employment is terminated by the employer, or
- the worker retires on or after attaining the age of sixty years or on medical grounds, that worker shall be paid a severance pay of one week’s wages in respect of each complete year of service; or
- over ten years and his employment is
- terminated by the employer for reasons, which do not amount to dismissal, or
-
- ended because the worker retires on or after attaining the age of sixty years or on medical grounds,
- worker abandons the service of an employer for good and sufficient cause, or
- a worker who resigns after a minimum of 10 years is eligible for a gratuity equal to severance pay, or
- terminated on the expiration of a contract for a definite period.
that worker shall be paid a severance pay of two weeks’ wages in respect of each complete year of service.
13th / 14th Month Pay
- No
- There is no statutory requirement to pay the 13th or the 14th month salary.
- Instead employers will pay a time and a half to employees that work during national/public holidays.
income tax
- Income Tax was enacted in Belize in 1924 and remained in that basic form up to July 1998, when Business Tax was introduced.
- The Legislation is now called “The Income and Business Tax Act”, with an effective date of January 1999 in its current form.
- Income tax is charged at a rate of 25%, and for residents of Belize, the first $14,500 of their annual income is exempt. Pension income is also exempt.
- To qualify for residency, an individual must be present in Belize for 183 days or more during a calendar year.
- There’s no graduated scale of taxation like in the U.S. and many other countries.
- Belize currently has no capital gains tax.
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Income Tax |
|
|
Rate |
Flat Rate of 25% |
deductible expenses
Effective 1 January 2010, employed persons, resident in Belize, are allowed a basic deduction of:
-
- BZ$25,600 in the case of an employed person whose total income, from all sources in a basis year, does not exceed BZ$26,000
- BZ$24,600 in the case of an employed person whose total income, from all sources in a basis year, exceeds BZ$26,000 but does not exceed BZ$27,000
- BZ$22,600 in the case of an employed person whose total income, from all sources in a basis year, exceeds BZ$27,000 but does not exceed BZ$29,000 and
- BZ$19,600 in the case of all other employed persons.
- There are no other deductions in ascertaining chargeable income except for allowable charitable donations which is restricted to one-sixth part of the chargeable income.
- A standard tax credit deduction of BZ$100 available to all residents.
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Deductible Expenses |
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immigration
- Visitors to Belize must possess a passport valid for at least three months after the date of arrival and a return ticket with sufficient funds to cover their stay.
- Visitors are given a one-month stay, after which an extension can be applied for with the Immigration Department.
- Visas are not required for citizens of the United States and its territories, Canada, United Kingdom and its territories, European Union, Caribbean and Central American countries.
- For visitors driving/boating into Belize from Guatemala or Mexico, a temporary importation permit must be secured at the point of entry. Vehicle/vessel permits are valid for 30 days.
- Belize's labor regulations are designed to protect the local job market to enable the employment of as many Belizeans as possible, and understandably so.
- Employment of foreign citizens is possible, however, under certain circumstances.
- There are two types of work permit applications in Belize:
- Application for permission to employ a foreigner:
-
- Any foreign citizen who wishes to work in Belize MUST be a legal resident (have resided in Belize for at least six months).
- He/she must be in the country legally, with proper visas and/or permits issued by the Immigration Department.
- The prospective employer must submit the application for the foreign worker he wishes to hire, along with three passport photos, $20 in stamps, a valid passport, and proof that this individual is qualified for the job.
- At the same time, the Labor officer must be satisfied that all efforts to employ a national have been exhausted.
- This includes providing proof that the vacant position was advertised locally for at least three weeks, following which, no suitable applicant was found
- Application for Temporary Self-Employment:
-
- This category would apply to foreign investors, among others.
- All applicants must be in the country legally, with proper visas and/or permits issued by the Immigration Department.
- They are required to produce proof of reasonably sufficient funds for their proposed venture (i.e.: local bank statement of account).
- Applicants must also obtain a reference from the relevant Ministry or Local Organization concerned with the category of work involved.
- In such situations, the six-month residency requirement is waived, and it is assumed that the venture will lead to creation of employment for nationals in the future.
- The permits are granted for a period of one year.
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Type of Visa/ Permit |
Documentation |
Validity |
Eligibility |
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Work Permit (Application for permission to employ a foreigner) |
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1 year |
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Work Permit (Application for temporary Self-Employment) |
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1 year |
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value added tax
- General Sales Tax (GST) in Belize is levied at a 12.5% rate.
- This applies to most goods, as well as services.
- There are a few exemptions, such as basic food items and basic medical supplies.
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VAT |
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Standard Rate |
12.5% |
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Exempt Rate |
0% |
withholding tax
- Dividends paid to non-residents, dividends paid to shareholders by entities licenses to provide telecommunication service that offer real time voice services are exempt from tax are subject to 15% withholding tax
- Gross contract payments in connection with contracts exceeding BZD 3,000 are subject to 3%
- Interest paid to non-residents is subject to 15% withholding tax
- Management fees, rental of plant and equipment and charges for technical services paid to non-residents is subject to 25% withholding tax
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WHT |
|
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Dividends |
15% |
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Gross Contract Payments |
3% |
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Interest |
15% |
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Technical Service |
25% |
termination
- On the termination of a contract of service lasting over one month, the employer shall at the worker’s request, give to him a certificate stating the duration of the employment, the nature of the work or services performed and, the rate of wages paid under the contract.
- If period of employment is over 2 weeks to 6 months, notice period is of 1 week
- If period of employment is over 6 months to 2 years, notice period is of 2 weeks
- If period of employment is over 2 years to 5 years, notice period is of 4 weeks
- If period of employment is over 5 years, notice period is of 8 weeks
- Where an employee who has been continuously employed by any employer for a period of
- five to ten years and
-
- his employment is terminated by the employer, or
- the worker retires on or after attaining the age of sixty years or on medical grounds, that worker shall be paid a severance pay of one week’s wages in respect of each complete year of service; or
- over ten years and his employment is
-
- terminated by the employer for reasons, which do not amount to dismissal, or
- ended because the worker retires on or after attaining the age of sixty years or on medical grounds,
- worker abandons the service of an employer for good and sufficient cause, or
- a worker who resigns after a minimum of 10 years is eligible for a gratuity equal to severance pay, or
- terminated on the expiration of a contract for a definite period.
that worker shall be paid a severance pay of two weeks’ wages in respect of each complete year of service.
statutory benefits
- These are benefits as postulated by law
- These include probationary period, public holidays, annual leave, sick leave, maternity leave, overtime pay and notice period
- Statutory benefits also include social security benefits
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Statutory Benefits |
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Probationary Period |
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Annual Leave |
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Public Holidays |
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Sick Leave |
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Maternity Leave |
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Overtime Pay |
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Notice Period |
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Social Security Benefits |
payments and invoicing
- The Business Tax Return along with the Tax Due must be filed by the 15th day of each month, covering all receipts for the previous month
- The penalties for not complying with the filing and payment deadlines are as follows:
-
- Late or Non-filing
10% of the tax due for every month or part of the month that the return remains outstanding, minimum of $10.00 for a maximum of 24 months.
-
- Late or Non-payment
1.5% per month on all unpaid balance from the time it was due up to the date of payment.
-
- Failure to file a return
A fine on summary conviction not exceeding $10,000.00, and in default, imprisonment not exceeding Two (2) years.
- Persons, who are not exempt from the payment of Business Tax must register with the Income Tax Department in order to file and pay.
- On completion of the registration process a Tax Identification Number (TIN) will be issued.
- The TIN number is the same number that is to be used for General Sales Tax and Customs and Excise processes.
ease of doing business
- The ease of doing business index is an index created by Simeon Djankov, an economist at the Central and Eastern Europe sector of the World Bank Group.
- Higher rankings (a low numerical value) indicate better, usually simpler, regulations for businesses and stronger protections of property rights.
- According to the World Bank Belize ranked 135th in the World in 2019 in terms of ease of doing business
employee accruals
| Christmas Bonus% | 0% |
| Christmas Bonus Over Vacations % | 0% |
| Severance per Year % | Employees are entitled to severance pay that equals 25 days of pay after 5 years of service (8.18% of annual salary) |
| Vacations % | Workers are entitled to 2 working weeks’ vacation annually (2.74% of annual salary) |
| Notice % | Employees are entitled to 2 weeks of notice after one year of service (2.74% of annual salary) |
| Christmas Bonus Over Notifications% | 0% |
| Vacations Plus% | 0% |
| Total percentage of Salary (yearly) | The total employment accruals as a percentage of salary per anum are equal to 13.66% |
employer accruals
Additional information (Country Accruals)
| Social security |
6.50% |
| Vacations |
7.40% |
| Severance per year of service |
3.84% |
| Description |
|
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Employer Accruals Additional information
| Employment Accruals | ||
| Annual Leave | Workers are entitled to 2 working weeks’ vacation annually. | This equals 3.8% (2/52 weeks) of annual income |
| Maternity Leave | A female worker is entitled to fourteen (14) weeks maternity leave on full pay. | This equals 27% (14/52 weeks) of annual income |
| Sick Leave | Workers are entitled to 16 days’ sick leave at their basic rate of pay providing they worked an aggregate period of not less than 60 days within 12 months. | This equals 4.4% (16/52 weeks) of annual income |
| Overtime | Overtime should be paid at the overtime rate of one and one-half times (1.5) the regular rate. | Normal hourly rate is around 24.5 BZD. Overtime is paid at an additional 12.25 BZD |
| Severance | Employees should be paid a severance pay of two weeks’ wages in respect of each complete year of service. | This equals 3.8% (2/52 weeks) of annual income |
| Social Security | Employers must contribute 6.9%. | This equals 6.9% of annual income |
